California Controller John Chiang reported last week that April tax collections were a gigantic 20.2%, or $2.44 billion, below 2012-13 budget projections. …Among the biggest surprises is a 21.5% or nearly $2 billion decline in personal income tax payments from what Governor Jerry Brown had anticipated. This reinforces the point that when states rely too heavily on the top 1% of taxpayers to pay the bills, fiscal policy is a roller coaster ride. California is suffering this tax drought even as most other states enjoy a revenue rebound. State tax collections were up nationally by 8.9% last year, according to the Census Bureau, and this year revenues are up by double digits in many states. The state comptroller reports that Texas is enjoying 10.9% growth in its sales taxes (it has no income tax), while California can’t seem to keep up despite one of the highest tax rates in the land.

The WSJ editorial suggests a supply-side response, but you won’t be surprised to learn that the state’s kleptomaniac governor is pushing an Obama-style soak-the-rich tax hike.

This would seem to suggest that California should try cutting tax rates to keep more people and business in the state, but Sacramento is intent on raising them again. Governor Brown and the public-employee unions are sponsoring a ballot initiative in November to raise the state sales tax by a quarter point to 7.5% and to raise the top marginal income-tax rate to 13.3% from 10.3%. This will make the state even more reliant on the fickle revenue streams provided by the rich. Meanwhile, an analysis by Joseph Vranich, who studies migration of businesses from one state to another, finds that since 2009 the flight of businesses out of California “has increased fivefold due to high taxes and regulatory costs.”

“So if California voters do the wrong thing, they will learn a hard lesson about the Laffer Curve.”…

and then…

Then they will band together with Oregon, New York and a majority of other states which will, by then, have crossed the point of no return, and institute an inter-state redistribution system at the federal level so that they can live for a few more years at the expense of a few remaining productive states, until those wither away too.

In short, what will happen is what is happening in Europe right now. Europe is now at that stage, about twenty years ahead. Hollande’s election puts Europe’s asking in firm majoritarian territory and even faux supply siders like Merkel are crumbling under the delusion of “socialism for growth”. Couple that with a sizable minority of useful idiots in the few remaining competitive countries of Europe and you see where things are headed in Europe — and in America. The voter lemmings of the western world are now on a fast suicide track. Europe as a whole is riding a 1-1.5% annual growth trendline. What chance does it have at maintaining its prosperity position in a world of seven billion growing at an aggregate 5% average annually? None, dismal. The competent will be asked to pay an “ever fairer share” at each election cycle until the continent implodes or withers away into economic insignificance.

But while Europe is twenty years or so ahead, don’t expect America to last twenty years before entering the same stage. As humanity prospers the pace keeps accelerating (yes, BTW, you know, indeed humanity as whole is growing gangbusters with total world GDP rising by 5% every year, but you would be justified not noticing if you live amongst the mere one billion suiciding voter lemmings of the western world). At the ever accelerating pace, declines that once used to take a hundred years are now completing in a few short decades. America is a mere couple of cycles of HopNChange from implosion.

“The WSJ editorial suggests a supply-side response, but you won’t be surprised to learn that the state’s kleptomaniac governor is pushing an Obama-style soak-the-rich tax hike.”
The WSJ is a biased source and Jerry Brown is not a kleptomaniac. California has been down before and always bounces back. I was a resident for 38 years so I do have a basis of experience. Calling someone names won’t win any arguments.

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[…] the destructive and self-defeating impact of high state taxes. Simply stated, when states such as California, Illinois, and New York get too greedy, the geese with the golden eggs fly across the […]

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[…] the destructive and self-defeating impact of high state taxes. Simply stated, when states such as California, Illinois, and New York get too greedy, the geese with the golden eggs fly across the […]